DELL WILL RECALL BATTERIES IN PC'S

By DAMON DARLIN

Published: August 15, 2006

Dell is recalling 4.1 million notebook computer batteries because they could erupt in flames, the company said yesterday. It will be the largest safety recall in the history of the consumer electronics industry, the Consumer Product Safety Commission said.

Dell, the world's largest PC maker, said the lithium-ion batteries were made by Sony and were installed in notebooks sold from April 2004 to July 18 of this year.

The recall raises broader questions about lithium-ion batteries, which are used in devices like cellphones, portable power tools, camcorders, digital cameras and MP3 players. The potential for such batteries to catch fire has been acknowledged for years, and has prompted more limited recalls in the past. But a number of recent fires involving notebook computers, some aboard planes, have brought renewed scrutiny.

Dell has reported to the safety agency that it documented six instances since December in which notebooks overheated or caught on fire. None of the incidents caused injuries or death. Dell said the problems were a result of a manufacturing defect in batteries made by Sony.

The safety agency said the batteries' problems were not unique to Dell, meaning that other companies using Sony batteries might also have to issue recalls. Sony has sold its batteries to most of the major computer makers.

The recalled batteries were used in 2.7 million Dell computers sold in the United States and 1.4 million sold overseas. The total is about 18 percent of Dell's notebook production during the period in question.

Depending on how many of the batteries are still in use, the cost of the recall could exceed $300 million. Dell refused to estimate the cost, but said the recall would not materially affect its profits. Sony, which affirmed yesterday that its batteries were responsible, said it was ''financially supporting'' Dell in the recall.

Dell said it would notify affected customers by mail and online, or through corporate sales representatives, and arrange to send a replacement battery. In the meantime, it advised owners to remove the original battery and use a power cord.

The largest previous safety recall of a consumer electronics product, in October 2004, involved a million lithium-ion batteries for Kyocera cellphones.

Dell has been bedeviled by reports of burning laptops in recent months. In June, a Dell notebook burst into flames during a conference in a hotel in Osaka, Japan. In that case, an analysis showed the fire was probably caused by microscopic metal particles produced during the manufacturing process. In July, firefighters in Vernon Hills, Ill., were called to an office of Tetra Pak, the food processing and packaging company, to extinguish a notebook fire hot enough to burn the desk beneath it.

That same month, a Dell notebook in the cab of a pickup parked alongside Lake Mead in Nevada caught fire, igniting ammunition in the glove box and then the gas tanks. The truck exploded. ''A few minutes later and we'd have been coming up out of the canyon when the notebook blew up,'' said Thomas Forqueran, owner of the computer and truck. ''Somebody is going to wind up getting killed.''

The battery problem is the latest setback for Dell, long a highflier on Wall Street. Faced with stiffer competition that has forced price cuts, it has reported lower-than-expected sales and earnings over the last year, sending its stock down more than 40 percent. It is spending $100 million to improve its customer service, which it found had alienated consumers.

Dell executives hope the recall, while vast, will prevent further damage to its image. ''We're getting ahead of the issue,'' said Alex Gruzen, senior vice president and general manager of the product group at the company. ''I don't want any further incidents to take place.'' Other computer makers that use Sony batteries were taking stock yesterday of their possible exposure to similar problems.

An Apple spokeswoman, Lynn Fox, said, ''We are currently investigating whether batteries that have been supplied to Apple for our current and previous notebook lines meet our high standards for battery safety and performance.'' A Hewlett-Packard spokesman said the company's notebooks would not be affected by the recall because its batteries were designed specifically for its products.

A Lenovo spokesman, Robert Page, said, ''To date, we have not seen any unusual pattern or problems with notebook PC's.'' The company said its batteries were designed differently from those used by Dell. ''Not all notebook batteries are the same,'' Mr. Page said.

Lithium-ion batteries pack more energy in a smaller space than other types of batteries. They are the cheapest form of battery chemistry and are increasingly being used in more types of consumer products.

What that means, said Richard Stern, associate director of fuel, electrical and recreational products at the product safety commission, is ''more batteries, more likelihood for quality-control problems and for design problems and so we'd expect more incidents and more recalls of these batteries.'' The federal safety agency has negotiated 10 recalls of lithium-ion batteries used in notebook computers since 2000 and another 12 battery recalls for other electronic products, including a Disney-brand children's DVD player.